The US Securities and Exchange Commission (SEC) has successfully cracked down another unregistered ICO as San Francisco-based blockchain startup Engima MPC has agreed to pay SEC registration charges.
According to a press release published on SEC website on Wednesday, February 19, Engima has agreed to pay $500,000 in penalty, return funds to harmed investors via a claims process, register its tokens as securities, and file periodic reports with the SEC.
The SEC order filed against Engima MPC alleges that this blockchain-based data encryption startup, raised approximately $45 million by selling 75 million digital tokens called ENG Tokens in an Initial Coin Offering (ICO) in the summer and fall of 2017. ENG Tokens were offered and sold as investment contracts with expectation of profit in the future, and therefore securities. But Engima did not registered
“its ICO as a securities offering pursuant to the federal securities laws and its ICO did not qualify for an exemption from the registration requirements.”
The Engima told investor that the raised funds would be used to develop a digital asset trade-testing platform, the Catalyst Application, and a data marketplace for cryptocurrency-related data.
According to the order, Engima violated Sections 5(a) and 5(c) of the Securities Act of 1933 by offering and selling these securities without having a registration with the commission.
Engima has agreed to pay all the charges and return of funds to investors who purchased tokens in the ICO with admitting or denying the misconducting. The funds will be returned to investors via a claim process about which John T. Dugan, Associate Director for Enforcement in the SEC’s Boston Regional Office, said:
“All investors are entitled to receive certain information from issuers in connection with a securities offering, whether it involves more traditional assets or novel ones. The remedies in today’s order provide ICO investors with an opportunity to obtain compensation and provide investors with the information to which they are entitled as they make investment decisions.
Engima MPC, formerly known as Newton Security Labs, Inc, is a San Francisco and Israel-based company founded in 2015. It is decentralized application (DApp) platform that offers secret contracts, a kind of smart contracts that let users to use private and sensitive data in decentralized applications and services.
The SEC raided on many ICOs in last year that include a famous fight with messaging platform Telegram. As Crypto Economy reported yesterday, February 19, the SEC and Telegram met in court yesterday where Judge P. Kevin Castel assured that there would be a judgment in the case before April 30, when gram investors expect to see the TON blockchain launched.
